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Old 10-31-2017, 05:59 AM
 
Location: Huntsville
6,009 posts, read 6,606,108 times
Reputation: 7036

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Quote:
Originally Posted by City Guy997S View Post
Good synopsis except nobody pays sticker for Rams or Fords and most folks struggle to get NADA value for used cars with big miles.
It's pretty obvious that you know zilch about diesel trucks. The Cummins diesel in the Ram is THE most sought after diesel engine in the heavy duty truck market. People pay NADA and then some depending on the area. That's easy enough to research for yourself.
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Old 10-31-2017, 06:06 AM
 
Location: Huntsville
6,009 posts, read 6,606,108 times
Reputation: 7036
Quote:
Originally Posted by City Guy997S View Post
Not true if you look at some of threads posted already......


What you see in the other threads about buying new are opinions as to why people buy new. Things like:


"I want the latest gadets."
"I want the peace of mind of a warranty."
"I want the zero interest because it's cheaper in the long run."
"A used car is more likely to break down than a new one and leave me with a big repair bill."


Rarely does anyone provide the math behind their rationale to actually prove that buying new is cheaper than buying used. Why? Because it isn't. We're not talking about investing your money into some other stocks/bonds, etc.... but flat out buying a car.


If you disagree, provide the math behind it. There are many ways to do it, and I've ran the numbers on them all. In almost no circumstances does it make economic sense (in my cases) to buy new. I just can't get there with the numbers.


When folks like me post up why we buy used it is because of research done on the market and comparisons against new versus used prior to buying. I would love a brand new vehicle, but I know that it doesn't make a lot of sense for me to take the depreciation hit just to have something with a few thousand miles less.
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Old 10-31-2017, 06:25 AM
 
Location: Huntsville
6,009 posts, read 6,606,108 times
Reputation: 7036
I'll help you with the math on a very simple one.


2017 Toyota Camry LE Sedan - New at my local dealership. (You can easily look it up based on my location. stk#18T0045)
$26,000+ tax/title/doc fee. At this dealer those are:
Tax - $2,080
Title - $16
Doc Fee - $499


Total out the door: $28,595.00. At zero down, with 0% interest that's $476.58 per month for 60 months.


On autotrader in my area, you can find a 2016 Camry LE with 45,249 miles for $15,949 (with a warranty). No doc fee. Only tax+title.
Total out the door: $17,860.35. With zero down at 3.5% interest for 60 months, the monthly payment is $297.67.


Let's look at a period of 2 years of ownership and predict what the vehicles would be worth in 2 years by looking at models 2 years older than the ones above. We will assume the owner drove 30k miles per year. So the 2017 "new" car would now have 30k miles, while the used 2016 would now have 75k miles since we bought one with 45k miles.


2017 Camry (looking at a 2015 model with 30k miles) - Clean retail is $16,950. In two years you could estimate to take a depreciation hit of $11,645.


2016 Camry (looking at a 2014 model with 75,249 miles) - Clean retail is $13,050. In two years you could estimate to take a depreciation hit of $4,810.35.


Now.... where's the better deal?
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Old 10-31-2017, 07:08 AM
 
Location: San Ramon, Seattle, Anchorage, Reykjavik
2,254 posts, read 2,703,971 times
Reputation: 3203
Quote:
Originally Posted by Nlambert View Post
I'll help you with the math on a very simple one.


2017 Toyota Camry LE Sedan - New at my local dealership. (You can easily look it up based on my location. stk#18T0045)
$26,000+ tax/title/doc fee. At this dealer those are:
Tax - $2,080
Title - $16
Doc Fee - $499


Total out the door: $28,595.00. At zero down, with 0% interest that's $476.58 per month for 60 months.


On autotrader in my area, you can find a 2016 Camry LE with 45,249 miles for $15,949 (with a warranty). No doc fee. Only tax+title.
Total out the door: $17,860.35. With zero down at 3.5% interest for 60 months, the monthly payment is $297.67.


Let's look at a period of 2 years of ownership and predict what the vehicles would be worth in 2 years by looking at models 2 years older than the ones above. We will assume the owner drove 30k miles per year. So the 2017 "new" car would now have 30k miles, while the used 2016 would now have 75k miles since we bought one with 45k miles.


2017 Camry (looking at a 2015 model with 30k miles) - Clean retail is $16,950. In two years you could estimate to take a depreciation hit of $11,645.


2016 Camry (looking at a 2014 model with 75,249 miles) - Clean retail is $13,050. In two years you could estimate to take a depreciation hit of $4,810.35.


Now.... where's the better deal?
Absolutely right. However, the better deal is to pay cash. Then, as usual, you come out way ahead on the used car.

The numbers are even stronger if you look at the used cars people typically buy. It's usually a 3-4 year off lease car rather than a 1 year old.

And that zero down, 0% interest deal? Less than 10% of consumers (and something less than 5% of auto buyers) qualify for that deal. Most of the time it requires a credit score of over 820 and more likely 830. That Toyota deal usually turns into 2.9%. The only company really giving out zero interest rate deals is Volkswagen, who is trying to regain market share by buying it.
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Old 10-31-2017, 09:56 AM
 
1,433 posts, read 1,054,479 times
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People are also forgetting that insurance is a lot higher on a new vs used car.....especially if you finance it and they dictate the coverage you must have/keep during finance period.
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Old 10-31-2017, 10:05 AM
 
Location: Huntsville
6,009 posts, read 6,606,108 times
Reputation: 7036
While insurance is typically higher on a new vs used car I don't factor that in since I always carry full coverage anyhow. That is typically what the finance company requires. It is based on value though, so in our case a 2014 Venza (bought brand new) cost us about $600/6 mos where the 2014 Expedition (bought used in 2015) costs us about $535/6 mos. Not a big difference, but that is because the value of the Expedition is higher than the Venza.


All that said, I'd still like to see the math from someone who holds onto buying new as being the better financial decision. Just to see if I can figure out how they get to that rationale.
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Old 10-31-2017, 10:17 AM
 
5,340 posts, read 14,084,719 times
Reputation: 4699
Quote:
Originally Posted by Nlambert View Post
I'll help you with the math on a very simple one.


2017 Toyota Camry LE Sedan - New at my local dealership. (You can easily look it up based on my location. stk#18T0045)
$26,000+ tax/title/doc fee. At this dealer those are:
Tax - $2,080
Title - $16
Doc Fee - $499


Total out the door: $28,595.00. At zero down, with 0% interest that's $476.58 per month for 60 months.


On autotrader in my area, you can find a 2016 Camry LE with 45,249 miles for $15,949 (with a warranty). No doc fee. Only tax+title.
Total out the door: $17,860.35. With zero down at 3.5% interest for 60 months, the monthly payment is $297.67.


Let's look at a period of 2 years of ownership and predict what the vehicles would be worth in 2 years by looking at models 2 years older than the ones above. We will assume the owner drove 30k miles per year. So the 2017 "new" car would now have 30k miles, while the used 2016 would now have 75k miles since we bought one with 45k miles.


2017 Camry (looking at a 2015 model with 30k miles) - Clean retail is $16,950. In two years you could estimate to take a depreciation hit of $11,645.


2016 Camry (looking at a 2014 model with 75,249 miles) - Clean retail is $13,050. In two years you could estimate to take a depreciation hit of $4,810.35.


Now.... where's the better deal?
Most of us don't keep a car for just 2 years. A 5 year analysis would probably be more realistic.
Where are your estimates for the maintenance and repairs on the 2016??
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Old 10-31-2017, 10:19 AM
 
5,340 posts, read 14,084,719 times
Reputation: 4699
Quote:
Originally Posted by stinkingliberal View Post
Used is still the way to go. The classic saying, that a car loses 20% of its value once you drive it off the lot, still holds.

Consumer Reports tackled this subject in detail a few years ago. They found that the best value was when the car is 3-5 years old. A lot of life left in it, but as little as half the new price.

To put it another way, the first 50K miles and/or the first 3-5 years burn off half the market value of the car. But they only consume 1/4 (or less) of its expected service life. I'd rather pay $X for the last 3/4 of a car's life than $2X for its entire life.
More like the 1st 4-5 years and 80,000-100,000 miles burn off half the market value.
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Old 10-31-2017, 10:25 AM
 
Location: Huntsville
6,009 posts, read 6,606,108 times
Reputation: 7036
Quote:
Originally Posted by TimtheGuy View Post
Most of us don't keep a car for just 2 years. A 5 year analysis would probably be more realistic.
Where are your estimates for the maintenance and repairs on the 2016??


I can certainly accommodate. My point wasn't that you keep them for 2 years but as a snapshot in time as to the costs at a time randomly selected for the snapshot. You can make it whatever you'd like and we can redo the numbers. I have a spreadsheet that I built to help me factor in the costs between new and used when we were looking.


What would you expect to be the maintenance costs in 5 years? Tires, brakes, oil changes? That's typically about it unless you drive 30k plus miles per year.


Most vehicles have a 6-10k mile oil change interval now and the cost averages about $50. So in the case of a 30k mile ownership you would spend maybe $150-$250 on oil changes. If you need a set of tires, you could consider $800-$1000. Brakes could run another $600-$800.


Typically though even if you buy new you will still pay for brakes and tires. The only thing that you may get covered are oil changes for the first year or two. So you'd save what.... $300-$500? The rest is still on you.
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Old 10-31-2017, 10:33 AM
 
5,340 posts, read 14,084,719 times
Reputation: 4699
Quote:
Originally Posted by Themanwithnoname View Post
You can find a unpopular/undervalued but still excellent quality vehicle for (in my case) less than half the cost of more popular models, and even MORE of a discount under new (price per mile)
Now this I will agree with. However many of us aren't just looking for the proverbial "something to get me from point A to point B". The other end of the spectrum is if you buy certain vehicles new, they hold much more value than other models.
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